Foxconn has lost the production contract for the Apple iPad 3, with the Cupertino company opting for rival Taiwanese manufacturer Pegatron instead.

According to Taiwan Economic News, Pegatron (which sounds like one of the Transformers) underbid Hon Hai - Foxconn's parent company - for the exclusive rights to build Apple's next generation tablet device, and therefore breaks the hold that its Chinese rival had with iPads 1 and 2.

It comes after Pegatron has recently boasted that it is manufacturing the iPhone 5 in massive quantities. Sources at the beginning of July said that the firm was contracted to build no less than 15 million devices. Its only previous work for Apple was to supply 4 million CDMA iPhone 4s.

Foxconn has recently been in the news for all the wrong reasons, being first rocked by a string of suicides at one of its Chinese factories, and then an explosion/fire at the plant where it made iPad 2s.

Apple's move comes after it has also reportedly ditched Samsung as its chip supplier for the iPad 3 in preference for Taiwan Semiconductor Manufacturing Company (TSMC).

Does it matter where the iPad 3 is manufactured? Let us know your thoughts in the comments below...

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